4. Advancing liberal multilateralism

By Mikko Huotari and Katja Drinhausen

This is chapter 4 of the MERICS Paper on China "Towards Principled Competition in Europe's China Policy: Drawing lessons from the Covid-19 crisis."

• The introduction of the National Security Law in Hong Kong, its behavior in Xinjiang have called into question China’s willingness to operate within the framework of a rules-based international order.
• European actions in the coming months and years will have to aim at containing the effects of the Chinese party-state’s illiberal policies.
• Regarding human rights, European measures will have to move beyond the failed quiet diplomacy approach.
• In terms of updating global rules for trade, Beijing’s current trade policy profile does not make it a natural partner for the EU.
• In the digital arena there are still limited opportunities to shape China’s approaches to improve data security and facilitate cross-border data flows.
• The EU’s connectivity strategy can provide an answer to key challenges associated with China’s Belt & Road Initiative. But only a financially bolstered approach will have real impact.

Liberal multilateralism will not survive 2020 unscathed – and a key reason for that is China’s corrosive impact. This year will be remembered not only for the Covid-19 pandemic but also for China disregarding its international obligations as enshrined in binding international treaties. With the introduction of the National Security Law for Hong Kong, Beijing has pushed through long-standing plans to exercise greater control in the city. In so doing, it has called into question China’s willingness to operate within the framework of an already fragmented rules-based international order.

The Covid-19 crisis has also shown how effective Beijing has become at instrumentalizing multilateral institutions, including the UN and its organizations, to promote its positions and narratives – such as on the pandemic’s origin and spread – and to gather praise for its contributions and approaches. These efforts were also visible in July 2020 when Beijing was able to coalesce a group of countries in the Human Rights Council to provide it with “landslide support” against a motion that criticized its measures in Hong Kong. This vote revealed once again the striking overlap between countries that Beijing can win over for political support in multilateral institutions, those that score as less “free” in relevant indices measuring democratic freedoms, and those that receive Chinese bilateral financial and development support.

Like-minded liberal OECD countries face a long-term systemic challenge to fortify and revitalize liberal approaches embedded in multilateral institutions against Chinese efforts to undermine and instrumentalize existing global institutions to promote its state-centered and authoritarian goals. With the United States’ retreat from global multilateralism and its deepening domestic crisis, European leadership in this arena matters greatly. Going forward, European action – or lack of it – on three specific challenges will play a major role in determining member states’ and the EU’s positioning in a shifting global power environment:

1. how to deal with China’s instrumental approach to multilateralism and its selective disregard for existing treaty obligations;
2. how to respond to the erosion of liberal multilateralism’s substance, specifically with regard to human rights and development issues; and
3. how to engage China in updating existing and negotiating new norms and rules for arenas in which principled conflicts will be expressed in the future, most notably trade and the digital space.

Despite Beijing’s claims to be a standard-bearer for global multilateralism, China’s actual approach is likely to clash more often and in more fundamental ways with OECD principles and European interest.

The PRC’s role and influence in global multilateral institutions has changed dramatically since it first took its seat in the United Nations (UN) in 1971. China’s strengthened influence is a direct reflection of its growing economic and political clout, and the result of a steep learning curve on how to engage in these organizations in a way that best serves its interests. China today prides itself in being a member of almost all inter-governmental organizations and a party to more than 500 multilateral treaties.¹ In practice, Beijing pursues a highly differentiated approach to global governance, attempting to shape institutions from within, ignoring commitments when these are at odds with its interests, resisting liberal substance, and circumventing existing frameworks for multilateral engagement while building new ones.²

China’s leaders focus their efforts on the limited number of international institutions within the UN structures of which China is an equal member. They see only the IMF and the World Bank, the WTO, and the newly embraced G20 as sufficiently power-balanced, controllable and non-intrusive. Beijing might recognize multilateral forums as valuable tools, but it does not accept the validity of universal rules and principles imposed on nations.

As a prominent Chinese scholar has expressed it: “The existing liberal international order is at odds with the domestic order led by the Chinese Communist Party within China.”³ The Chinese party-state sees the liberal normative framework, and especially the focus on liberal democratic institutions, individual human rights and inclusion of non-governmental actors as key stakeholders, as a threat to the legitimacy and political security of the CCP. Selective and instrumental multilateral cooperation thus serves Beijing’s domestic policy approaches as prioritized by the CCP leadership: focusing on sovereignty, state authority and regime security, and economic development rights as global priorities.

Xi and his strategists’ vision is reflected in the benign-sounding concept that Chinese diplomats have been pushing since 2013: “a community with shared future for mankind”. In practice, this vision emphasizes absolute national sovereignty over all domestic matters, “political pluralism” – i.e., equal acceptance of authoritarian forms of governance and their contributions to international rule-shaping – as well as “common values”, meaning a lowest common denominator negotiated by states.

Ultimately, China wants to pre-empt international pushback and questioning of its tactics such as it is currently experiencing over Hong Kong and the Xinjiang human rights crises. Framed as “democratic representation in international governance”, Beijing seeks to reshape the power structures and principles underpinning existing multilateral forums and establish alternative platforms for engagement to reset global standards and “break the hegemony” of Western nations.⁴

In December 2019, Chinese Foreign Minister Wang Yi invited the European Union to “join hands to defend multilateralism and maintain international order”.⁵ A few months later, the High Representative of the European Union, Josep Borrell, lauded the EU’s and China’s “common language” on this issue,⁶ although he seems to have recognized during the Covid-19 crisis that the  “approaches to multilateralism differ”. Given the current trajectory of China’s international behavior, Europeans will come to realize that Beijing is not only non-convergent but a formidable competitor for Europe’s liberal multilateralism.

Issue 1 – General principles: Power, not rules

At first glance, China seems to be relatively aligned with what most liberal OECD governments preach and often practice in global institutions. Overall, Beijing is largely compliant with the established rules in international institutions to which it has committed. It also presents itself as a “supporter, defender and promoter” of multilateralism and global governance. It is already the second-largest contributor to the UN and now leads four of the 15 UN specialized agencies.

China is, however, increasingly demonstrating its unwillingness to follow rules and obligations that go against its key interests. In the competition for global power, the Chinese leadership will leverage its growing diplomatic capabilities and institutional clout to achieve its strategic priorities. Europe should therefore expect more self-serving and outright disruptive behavior in this arena.

Domestically, the CCP has ensured that it enjoys almost unchecked power, rendering the rule of law and legal institutions secondary functions. Globally, the leadership is also less willing to accept any constraints or higher authority. China’s open and assertive violation of international commitments such as the Sino-British Declaration or the rejection of international verdicts, such as by the UNCLOS arbitration tribunal on South China Sea claims between the Philippines and China in 2016, have become a permanent feature. With critical developments, for instance in Hong Kong, unfolding by the day, Europe will have to defend the principles that it cherishes.

Issue 2 – Human rights and development: Substance reversed

Conflicts of interests between Europe and China are even easier to detect when it comes to the substance of global multilateralism. In the realms of human rights and sustainable development, for instance, Beijing is pushing the existing international regimes and communities of practice into a modus operandi where the state matters most: as the sole protector of domestic security, the central driving force for development and the ultimate arbiter to grant or take away human rights in line with security and development needs.

The human rights violations in Xinjiang and the undermining of democracy in Hong Kong stand out for their corrosive impact on global multilateral institutions. Beijing justifies its treatment of predominantly Muslim minorities in Xinjiang and securitization of Hong Kong with the need to protect China’s political stability and territorial integrity from terrorism and secession, emphasizing collective rights held by the state over individual rights. Its approach to solving these issues clearly conflicts with its obligations under international human rights law.

Numerous reports support claims that, in Xinjiang, China has deprived large numbers of Uighurs and other ethnic minority members of their liberty, separated families, enforced birth-control and facilitated forced labor. This is particularly serious as it means that China has not only violated its obligations as a party to conventions against racial discrimination (CERD) and torture (CAT), but such wide-spread, systematic violations of basic human rights may even qualify as crimes against humanity.

Measures such as targeted birth control or forcibly transferring children between ethnic groups are prohibited under the Genocide Convention. The introduction of the National Security Law in Hong Kong, too, will likely result in frictions with the International Covenant on Civil and Political Rights (ICCPR) which Hong Kong is party to.

The Chinese party-state is not only resisting pressure for change and independent investigations by UN rapporteurs but increasingly going on the offensive in positively framing and rallying international support for its course of action. On an institutional level, China has used its position in the Human Rights Council and other UN institutions to counter and contain criticism and statements against its practices through a variety of means.⁷ It has also used existing multilateral platforms, such as the Shanghai Cooperation Organization it co-founded in 2001 and the South-South Human Rights Forum it established in 2017, to promote its positions and values.⁸

Beijing presents its governance approach at home as a model for others to learn or borrow from.⁹ In the sphere of development, China promotes its view of political stability and security as a precondition for development and its approach to development as a solution for security challenges.¹⁰ Furthermore, it is putting its money behind this. In 2016, China pledged to contribute 200 million USD to the United Nations over a ten-year period to help establish the United Nations Peace and Development Trust Fund (UNPDF), with a special focus on Africa.¹¹ This is accompanied by Chinese-led multilateral platforms such as the China-Africa Peace and Security Forum, which was held for the first time in 2019 as part of a broader push to link peace and security issues in China-Africa diplomacy.¹²

Most prominently, China has been successful in promoting its bilateral diplomacy via the Belt & Road Initiative (BRI) as a quasi-multilateral arrangement, framing it as the leading global development initiative. In early 2020, 138 countries were counted as part of the BRI, the vast majority of which were developing countries. With this initiative, China is clearly filling a demand for access to funds and infrastructure, often providing recipients with a sense of choice and agency while also contributing to the achievement of global Sustainable Development Goals (SDG).

The BRI, however, in many ways exemplifies China’s divergence from OECD principles. By objective and composition, China’s development finance in the framework of the BRI and beyond differs fundamentally from Western approaches. Beijing does not report its expenditures to the OECD Development Assistance Committee (DAC), and BRI development financing comes with far fewer strings attached in terms of good governance and human rights standards.

Despite these divergences, development policy remains a space that offers opportunities for cooperation. China has in recent years been confronted with criticism over the financial, social, and environmental sustainability of its investments and projects. Beijing has responded with an internal reflection and institutional adaptation process. This provides new opportunities for multilateral cooperation. The new Multilateral Cooperation Center for Development Finance (MCDF), that was initially to be established at the World Bank and is now situated at the AIIB, could be a testing ground.

However, the real test for China’s (non)convergence on sustainable development practices is just around the corner: It is unclear whether Beijing will align with European and other G-20 partners in “building back better” (i.e., greener) post Covid-19. It also remains to be seen to what extent it can and will continue to provide debt relief for those affected by the pandemic and the global economic fallout.¹³

Issue 3 – Trade and internet governance: Negotiating new and revising existing rules

There are two major – partly intersecting – areas of global multilateralism where the world and Europe urgently require new and better rules: global trade and the digital space. On trade, Europe and China are formally engaged in discussing WTO reforms – albeit with hardly any signs of progress. For the foreseeable future, Beijing is unlikely to agree to new rules that would tame state-interference, neutralize subsidies, protect IP rights and strengthen transparency and reciprocity. On the contrary, with its own ambitious trade policies it is seeking to compete as a standard- and rule-setter across the world, including in key regions where the EU wants to make its mark.¹⁴

The same is true for the digital space, where China is very explicit about its ambitions to craft new norms itself, ranging from digital trade to data security, IoT, blockchain and the future architecture of the internet. On global internet governance, specifically, the PRC presents itself as a champion for the interests of the “majority of countries”. This approach, personally endorsed by Xi Jinping, should be read as a rallying call against Western dominance over the design and governance of the internet.

Although official Chinese rhetoric is no longer openly hostile to the multi-stakeholder model of internet governance, it prioritizes cyber sovereignty and an approach focused on the right of national governments to determine features of cyberspace within their jurisdiction, sidelining civil society or private corporations in negotiations. China also supports technical proposals in standard-setting forums such as the International Telecommunications Union that could facilitate increased state control over internet infrastructure globally. China’s 2017 International Strategy for Cooperation on Cyberspace calls expressly for the UN Internet Governance Forum (IGF) to play a greater role in global internet governance, and commits Beijing to promoting reform of ICANN, the US-based NGO that oversees the internet’s global domain name system.

A crucial cross-cutting area of incompatibility between China and the EU is the different standards and priorities when it comes to securing data and information flows. While the EU places a focus on strong privacy protections for personal data and is intent on securing this in multilateral agreements, China is promoting its vision of state-centered cyber sovereignty and is more concerned with securing access to information and personal data for the purpose of ensuring political security. This will continue to hinder meaningful transnational agreements aimed at facilitating cross-border transfer of data and services.¹⁵

“We have our own letters” Josep Borrell, HRVP, responded to the question why Europe was not joining like-minded partners to coordinate policies on Hong Kong in July 2020. However, the EU cannot promote the norms and principles associated with liberal multilateralism alone, much less shape China’s trajectory on any of these issues.

As the EU has stated in its “Strategic Outlook” on EU-China relations, it is committed to  engaging with China to uphold the rules-based international order, including all three pillars  of the UN: human rights, peace and security, and development. With China winning the numbers game, such engagement will become more difficult. The influence of liberal economies with democratic political systems at the UN or in the WTO is shrinking rapidly. When 22 liberal democracies sent a joint open letter expressing concern over internment camps in Xinjiang to UN Human rights authorities in 2019, this was followed by a letter with 50 signatories lauding China’s approach and achievements in “protecting and promoting human rights through development”.¹⁶

Building on the legal and institutional foundations of liberal multilateralism, Europe can, however, still exert significant influence – if it chooses to. The UN and the WTO provide an important platform to address specific behaviors. Successful pushback led by Five Eyes states and India, for instance, against the use of the phrase “shared vision of a common future” in the declaration marking the 75th anniversary of the UN, points to the continued relevance of coordination with old and new partners.¹⁷

On trade and digital issues, the EU can at least be peer competitor if not global leader in setting rules and standards. The GDPR’s global impact and Europe’s comparatively successful global trade strategy are examples of its continued normative power. Cooperation with like-minded partners such as Japan, aligning with the United States on select issues and, ultimately, building a global network of partners could tilt the balance towards OECD interests and help preserve competitive liberalism in trade and digital affairs. As Chinese tech firms come increasingly under pressure for data privacy and national security concerns – a direct outcome of China’s domestic laws and regulations – partial cooperation with the EU may well become more attractive for China.

To promote liberal multilateralism globally, the overarching logic of European responses and initiatives vis-à-vis China has to be significantly more competitive, accepting the systemic rivalry that China’s leaders take for granted. If Borrell wants Europe to start speaking the language of power, here is a field to begin with. Many of the specific actions by Europe in the coming months and years will have to aim at containing and limiting the effects of the Chinese party-state’s illiberal policies. One of the biggest constraints on China’s international behavior will continue to be that Beijing wants to be seen as a trustworthy, reliable and responsible great power.

With cooperation and conditional engagement on specific issues, such as shaping the rules on trade, digital and development, there is plenty of room to act. Europe’s course of action will, however, have to take China’s non-convergence seriously and create the leverage to work around China where working with it proves impossible or even damaging.

This will remain the case for universal human rights as China challenges the concept outright and common ground has shrunk to poverty alleviation and the protection of basic rights to life, health and education. Concrete measures will have to move beyond the failed quiet diplomacy approach of the past towards compelling and resisting. Calling out violations consistently and building new alliances to coordinate responses is not only a basic moral obligation – it is a strategic imperative in competing for the future of multilateralism. The EU and its member states should follow through with political options provided in EU and international law. A recent example is the EU resolution calling for a case to be filed before the International Court of Justice alleging that China’s decision to impose national security legislation on Hong Kong violates the Sino-British Joint Declaration and the International Covenant on Civil and Political Rights (ICCPR).

As a major donor and actor in the development sphere, the EU should make more strategic use of its capacities to engage and shape China’s behavior. The EU will have to better use all available platforms, from traditional multilateral forums in the UN to newer ones such as the UN Peace and Development Trust or the Multilateral Cooperation Center for Development Finance (MCDF) to engage China on its lending practices. Working with partners, the EU should also promote liberal multilateralism bottom-up by building capacities in developing countries to better monitor, evaluate and assess the conditions of investments and support their ability to advocate for their interests.

Most importantly, member states will have to empower the EU to deliver on its own connectivity policies. The EU’s connectivity strategy has built-in European principles and norms that in many ways provide an answer to key challenges associated with the BRI. But only a financially bolstered approach can have real impact on environmental, social and financial sustainability in Eurasia and Europe’s neighborhood. The current European approach also lacks recognizable branding and could benefit from synergies with initiatives with like-minded partners, such as the United States’ Blue Dot Network and Japan’s new connectivity strategy.

In terms of updating global rules for trade, Beijing’s current trade policy profile does not make it a natural partner for the EU. Given limited prospects for success and diminishing relative power, the shift to a resist and limit logic is warranted. This will entail focusing on targeted adjustments that can protect the European market economy system and mitigate the damage of China’s distortionary behaviors. European actors should double down on working with like-minded partners on introducing new rules and disciplines on subsidies, IPR protection and the treatment of state-owned enterprises (SOEs). With the ongoing WTO crisis further reducing the EU’s power, effective rulemaking in light of China’s trajectory will therefore to a large extent depend on making the transatlantic relationship functional again.

In the digital arena there are still limited opportunities to engage and shape China’s approaches to improve data security and facilitate cross-border data flows. But the EU should also engage more proactively with key partners such as India and the US as well as stakeholders in critical third regions on data privacy and security frameworks to set global standards. The EU should resist and limit – as much as possible – the global fragmentation and nationalization of the digital world. In global internet governance, Europe needs to level-up its support for the multi-stakeholder model at the global level (such as the Internet Governance Forum) with a focus on values and innovation.

In adjusting their policy responses across these fields, European decision-makers should be guided by two considerations. First, China’s selective adherence to essential international obligations puts into question Beijing’s trustworthiness as a partner more broadly. Second, the issues outlined above constitute an integral and interlocking system of liberal multilateralism. Non-action or silence on one of them will damage Europe’s long-term capacity to compete and deliver in adjacent arenas.

Endnotes

1 | Beijing Xiangshan Forum Secretariat (2019. “Speech at the Opening Ceremony of the 9th Beijing Xiangshan Forum by Gen. Wei Fenghe, State Councilor and Minister of National Defense of the People's Republic of China.” Beijing Xiangshan Forum. October 21. http://www.xiangshanforum.cn/speakingDetail_EN?code=gK1S2gSheg3DA708. Accessed: July 27, 2020.

2 | Huotari, Mikko (2017). “Global Governance: A differentiated approach.” In: Eva Pejsova (ed.). Chinese futures: Horizon 2025, 81-90. European Union Institute for Security Studies. https://www.iss.europa.eu/content/chinese-futures-horizon-2025. Accessed: July 20, 2020. For a detailed discussion of Beijing’s behavior and strategies see also Hart, Melanie and Blaine Johnson (2019): “Mapping China’s Global Governance Ambitions - Democracies Still Have Leverage to Shape Beijing’s Reform Agenda.”  Center for American Progress. https://www.americanprogress.org/issues/security/reports/2019/02/28/466768/mapping-chinas-global-governance-ambitions/. Accessed: July 7, 2020.

3 | Liu, Jianfei 刘建飞 (2016). 中美新型大国关系中的国际秩序博弈(China-US competition over international order in the new model of major country relations). Meiguo yanjiu (American Studies), 5, 9-18.

4 | Hart and Johnson (2019). Wang, Yiwei (2013). “China Model' breaking hegemony of Western universal values.”  People's Daily Online. January 16. http://www.china.org.cn/opinion/2013-01/16/content_27693951.htm. Accessed: August 11, 2020.

5 | Xinhua (2019). “Chinese FM calls on EU, China to jointly safeguard multilateralism, international order.” Xinhuanet. December 19. http://www.xinhuanet.com/english/2019-12/18/c_138638794.htm. Accessed: July 15, 2020.

6 |  Borrell, Josep (2020). “Trust and reciprocity: the necessary ingredients for EU-China cooperation.” European External Action Service. May 15. https://eeas.europa.eu/headquarters/headquarters-homepage/79355/trust-and-reciprocity-necessary-ingredients-eu-china-cooperation_en. Accessed: August 5, 2020.

7 | Roth, Kenneth (2020). “China’s Global Threat to Human Rights.” In: World Report 2020, 1-19. Human Rights Watch. January 14. https://www.hrw.org/world-report/2020/country-chapters/global. Accessed: July 14, 2020.

8 | South-South Human Rights Forum (2017). “Beijing Declaration adopted by the First South-South Human Rights Forum.” South-South Human Rights Forum Portal. December 10. http://p.china.org.cn/2017-12/10/content_50095729.htm. Accessed: July 8, 2020.

9 | Xinhua (2019). “China shares wisdom of social governance with world.” Xinhuanet. November 11. http://www.xinhuanet.com/english/2019-11/19/c_138567460.htm. Accessed: July 21, 2020.

10 | Benabdallah, Lina (2016). “China’s Peace and Security Strategies in Africa: Building Capacity is Building Peace?”. In: African Studies Quarterly 16(3-4). http://asq.africa.ufl.edu/files/v16a3.Lina2_.HD_.pdf. Accessed: July 29, 2020.

11 | Nichols, Michelle (2016). “China takes first step in $1 billion pledge to U.N. to fund peace, development.” Reuters. May 6. https://www.reuters.com/article/us-china-un/china-takes-first-step-in-1-billion-pledge-to-u-n-to-fund-peace-development-idUSKCN0XX1YI. Accessed: July 24, 2020.

12 | Ministry of Defense of the PRC (2019). “Feature: Overview of 1st China-Africa Peace and Security Forum.”  Ministry of Defense of the PRC. July 17. http://eng.mod.gov.cn/news/2019-07/17/content_4846012.htm. Accessed: August 4, 2020.

13 | Global Times (2020): “China suspends debt repayment for 77 developing nations, regions.” Global Times. June 7. https://www.globaltimes.cn/content/1190846.shtml. Accessed: July 23, 2020.

14 | Arcesati, Rebecca et. al. (2020). „Chinas digitale Plattformökonomie: Eine Bestandsaufnahme im Kontext von Industrie 4.0 - Herausforderungen und Chancen für deutsche Akteure.“ MERICS Report. June 1. https://merics.org/sites/default/files/2020-06/MERICSReportDigitalPlatformEconomyDE03.pdf. Accessed: July 9, 2020.

15 | Willemyns, Ines (2019). “The EU, China and the free flow of data – how domestic concerns might prevent agreement at the multilateral level.” Queen Mary University of London. November 15. https://www.qmul.ac.uk/euplant/blog/items/the-eu-china-and-the-free-flow-of-data--how-domestic-concerns-might-prevent-agreement-at-the-multilateral-level.html. Accessed: August 7, 2020.

16 | Yellinek, Roie and Elizabeth Chen (2019). “The “22 vs. 50” Diplomatic Split Between the West and China Over Xinjiang and Human Rights.” China Brief 19(22). Jamestown Foundation. December 31. https://jamestown.org/program/the-22-vs-50-diplomatic-split-between-the-west-and-china-over-xinjiang-and-human-rights/. Accessed: July 19, 2020.

17 | Lakshman, Sriram (2020). “U.N.-75 declaration delayed.” The Hindu. June 26. https://www.thehindu.com/news/international/un-75-declaration-delayed/article31927129.ece. Accessed: June 30, 2020.

This is chapter 4 of the MERICS Paper on China "Towards Principled Competition in Europe's China Policy: Drawing lessons from the Covid-19 crisis." Continue with Chapter 5 "Delivering Global Public Goods" or go back to the table of contents.